TCS BANK: Innovating in Russia

A story of a great Russian bank that is struggling with country risks

I chose the company as an example of effective allignment between business and operation model. The company has elegant business model which was totally unique for Russia at that time and still is.

This effectiveness failed though because of external factors which no reasonable person could have predicted. I think I need to share this example with my section mates to show how you can be 100% correct but fail anyway in a risky market.


The company was launched in 2007 by a serial entrepreneur in Moscow. His only financing was his own stake of $70 mln and he invested it all, so not in line with what they teach un in FIN 1.

Business model

Moscow’s Tinkoff. Credit Systems Bank (TCS) was founded with the goal of becoming Russia’s first pure credit card lending institution by:

  • selling competitive, premium-quality card products,
  • aggressively expanding its portfolio,
  • minimising transactions per-card processing costs and,
  • in the absence of any branches, drive dynamic direct marketing campaigns and provide the best possible customer experience.

Initially TCS’s business model was copied from Capital One, that was sending credit cards via mail and financing it by lending quick money from the market (not by inviting deposits). Noone has done anything like this in Russia before. Credit cards penetration was close to 0.


Allignment with operating model

Components of TCS’s  business model were backed by the corresponding features of its operating model, making the company really successful.




So, TCS was very successful and even went public in early November 2013. And then something else happened.

Banker’s Black Friday

“Not everyone can lose a billion in a couple of hours” – Oleg Tinkov (TCS owner), November 19th, 2013.

On November 19th 2013 Russian government passed a law on banking services with a mistake that could be interpreted as a ban on TCS business. TCS shares fell 40% on that day and though the mistake was corrected, share TCS’s price never recovered.

Oleg Tinkov said that theri bank was the last entity that was traded without the “Russian factor”. Operationally the company is still performing great and top management is thinking about delisting from London Stock Exchange if “investors will not appreciate our great performance”.



Share price of TCS Group Holding PLC:

share price




  1. Company’s website –



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